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Case Details for "McKesson Corp. & First Data Bank "
First Data Bank and McKesson Corp. Pay $350M to Settled Drug-Pricing Case
First Data Bank (FDB) has a virtual monopoly as a publisher of average wholesale price (AWP), which is the common pricing benchmark used for virtually all drug reimbursement transactions. McKesson Corp. is one of the nation's largest pharmaceutical distributors.
Plaintiffs alleged that beginning in 2001, FDB and McKesson reached a secret agreement on how the wholesale acquisition cost (WAC) to AWP markup would be established for hundreds of brand-name drugs. The companies raised the WAC to AWP spread from 20 percent to 25 percent for more than 400 drugs that previously received only the 20 percent markup. FDB published 25 percent spreads despite information from manufacturers specifying a 20 percent markup as appropriate.
The complaint alleges that to conceal the scheme, FDB and McKesson agreed to effectuate price changes only when some other WAC-based price announcement was made by a drug manufacturer. Also that until March 15, 2001, FDB publicly and falsely represented that its AWP information was obtained directly from drug manufacturers through a survey of three national wholesalers, the plans say. As a result of the artificial increase in markup of the WAC to AWP to 25 percent, thousands of third-party payers and consumers have had their drug prices increased, the plans say.
Under the settlement, McKesson will pay $350 million to settle the claims of all consumer co-pay class members, all third-party-payer class members and the claims of all cash payers. $40,425,000 to cash payer settlement class; $20,900,000 to co-pay consumer settlement class; and $288,675,000 to third party payers settlement class.
Posted on:2009-08-06
Company: McKesson Corp. & First Data Bank
Class: consumer purchasers and a class of third-party payers
Scope: Nationwide
Type of Case: RICO
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